There was an allowance for a taxpayer to request a ruling substantiating that the expatriation was not for tax avoidance.
The AJCA attempted to strengthen the provisions of HIPAA because there was still a significant amount of public debate on the merits of expatriation and the loss of tax revenues.
877A subjects a "covered expatriate" to tax on gains in excess of $600,000 from a deemed sale of an individual's worldwide assets on the day prior to that individual's expatriation. Under the former alternative income tax rule, an expatriate could avoid income taxation on a built-in gain if the expatriate did not realize the gain within the 10-year window under Sec.
The taxpayer's net worth on the date of expatriation is $2 million or more; or
Note A careful projection of an individual's travel and lifestyle plans and alternatives is required to evaluate the tax risks of expatriation. CPAs should document client expectations to help monitor their actual activities and advise them during the sensitive 10-year postdeparture window.
tax on worldwide income and to set the clock running on the 10-year period, wealthy expatriates must demonstrate they have been tax-compliant for at least five previous years and file an information disclosure statement with the IRS, describing their act of expatriation and providing financial information.
Expatriates, in order to avoid being taxed on worldwide income, musts ever physical ties with the United States, which is evidenced by presence in the United States for no more than 30 days in each year in the 10-year period after expatriation. A daily calendar with third-party evidence of all travel is essential to prove this.
source income and gains for a 10-year period following expatriation. The principle behind this is that they are taxed on income and gains from assets located in the United States even where general source rules would look to the non-U.S.
As a direct response to the recent trend in corporate expatriations, politicians have questioned the patriotism of firms that reorganize outside the U.S.
corporations by foreign corporations (transactions we refer to as merger-related expatriations).
Expectations and expatriations: Tracing the causes and consequences of corporate inversions.
Keywords: corporate expatriation; inversion; tax haven; merger